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Five ways generative AI can help retailers improve the automotive customer experience

Matt Desmond
Jun 4, 2024

Generative AI can help retailers improve customer and vehicle knowledge to boost sales and service

Customers in today’s digitally enabled world expect seamless, convenient, and personalized retail experiences. It’s no different when it comes to buying a vehicle. To compete, automotive dealerships must provide customers with the right offer, vehicle, and service at the right time. And throughout this end-to-end journey, retailers need to access data from various systems which provide vehicle sales, finance, and customer service information. This is especially important as data can change at any time in the fast-paced environment of automotive retail. This creates complexity and can impact the customer experience.

The dizzying pace of change in sales, including pricing updates, marketing campaigns, and sales incentives, is one reason many automotive original equipment manufacturers in North America are beginning to use generative AI (GenAI). GenAI is a game-changing technology characterized by its ability to learn, adapt, and collaborate in ways once reserved for human intelligence.

GenAI can help automotive original equipment manufacturer (OEM) sales and marketing teams and retailers improve the customer experience by providing information faster and more accurately. The power of GenAI can help to assemble responses to important questions about the sales process and enable staff to spend more time with customers, building relationships and understanding their needs.

Applying GenAI can also help with parts, service, and, of course, customer interactions. With the right application of the technology, automotive sales, marketing, and retail teams win, and customers will receive the right answers to questions more quickly than with humans alone.

The fast pace of automotive retail presents challenges

There is a massive amount of data to consult and understand in context to deliver on customer expectations. Managing this data to personalize recommendations, align vehicles in stock with customer preferences, and maximize sales and service opportunities is a challenge most often requiring years of experience with the product and the business. GenAI can help address these challenges and improve the customer experience even for the most seasoned automotive retail team member.

Here are five use cases which illustrate how GenAI can improve core processes in automotive retail, including customer shopping, customer service, and OEM manufacturing, marketing and vehicle delivery.

1. Order

GenAI can provide important data points in the ordering process for OEMs and dealers. It can be trained on inventory and sales history data to provide market intelligence that would otherwise be very time-consuming to obtain and analyze. This information can improve vehicle order management decision-making for the OEM and the dealer to ensure the right vehicle is available at the right time for the customer.

2. Sales

Recommending the best vehicle for a customer requires OEMs and dealers to understand numerous data points, including customer purchase history and preferences, available inventory, inventory on order, sales incentives, recent OEM and insurance offerings, and telematics. GenAI can help OEM teams and retailers track all this. For instance, a busy parent with a history of buying minivans might be interested in a new model with a bigger trunk and new safety features, based upon preferences, available inventory, and the best deals available. The offer can be enhanced with a tailored sales incentive or easy add-ons like insurance to meet the customer’s expectations based upon their profile.

3. Finance

GenAI can accelerate and streamline the cumbersome process of gathering information from various applications for finance. Traditionally, salespeople juggle multiple logins and interfaces to obtain a customer’s credit score, current loan rates, and available deals. GenAI can gather finance data from disparate sources in real-time, saving time for salespeople and placing the most up-to-date information in their hands to share with customers quickly.

Furthermore, GenAI has the analytical advantage of answering complex customer questions quickly. For instance, if a customer wants to know how much a trade-in will reduce monthly payments, GenAI can instantly access the trade-in value, calculate the adjusted loan amount, and present a revised payment schedule within parameters set by the dealer. Similarly, GenAI can offer personalized recommendations for finance options that align to customer input (e.g., a target monthly payment and term).

4. Insurance

GenAI can recommend the right insurance for each customer by analyzing data on driving habits, demographics, and local insurance trends. Outside of basic coverage options, GenAI takes personalization to a new level by considering factors like vehicle usage (highway vs. city driving), climate, and even typical road conditions to identify potential risks and tailor coverage accordingly.

GenAI can also highlight benefits relevant to the customer’s needs. A weekend traveler who works from home may want a policy with lower daily coverage limits but better features like roadside assistance or rental car coverage. Improved personalization and speed of providing options can increase customer satisfaction and boost sales of more relevant insurance products.

5. Service

Finally, GenAI has the power to revolutionize customer service inquiries and internal dealer aftersales service processes. If a customer has car trouble, GenAI can suggest potential diagnostics and service options based on data about the vehicle’s history and past repairs and available remedies, including software patch updates. Additionally, GenAI can flag any open recalls or missing vehicle software, saving the customer time when deciding next steps for service.

When a vehicle is ready for repair, GenAI can improve service efficiency by optimizing scheduling. Equipped with data on technician availability and parts inventory, GenAI can share expected service completion times and help service departments set expectations and automatically notify customers if there are changes impacting completion.

With GenAI, aftersales service will continue to move faster as vehicles become increasingly software-based. In the future, GenAI technology will be trained to identify the parts needed, place the order, notify the customer, and create an appointment proactively with the customer’s consent. This can improve customer satisfaction, streamline operations, and help keep the wrenches turning in the service bays.

Revving up your GenAI engine

OEMs have a unique opportunity to decide how they can use GenAI capabilities to improve core processes as the technology is applied to all aspects of automotive retail. Exciting tools are reaching the market every day and expanding the pool of use cases. Now is not the time to hit the brakes on AI adoption; it’s time to accelerate progress toward using this technology to elevate customer experiences in a new era for automotive.


Matt Desmond

Client Partner & Auto Industry Domain Specialist
I help Automotive and Heavy Equipment Manufacturing clients enhance sales, marketing and aftersales processes in their dealer networks through innovative digital tools & approaches to improve customer experience & retention and dealer digital integration.